Thank You, California Voters

Sandra R. Hernández, President & Chief Executive Officer

November 22, 2016
Sandra Hernandez
Sandra R. Hernández

The health care agenda is certain to be dominated for some time by the national debate over the future of the Affordable Care Act (ACA), but I want to take a moment to recognize several important state and local health policies that were overwhelmingly backed by California voters.

While some on the national scene favor a rollback in the public commitment to health care for all, Californians stepped up on November 8 and demonstrated strong support for low-income communities having reliable access to health care when and where they need it. California voters also demonstrated they understand that growing consumption of sugary drinks and widespread use of tobacco products increase the disease burden on our families and the health care system that cares for them. Please note that the California Health Care Foundation does not take positions on ballot initiatives nor do we work to support or oppose any initiatives.

Here are some important questions that were settled by Golden State voters in the 2016 election.

CheckboxProposition 52: Medi-Cal Hospital Fee Program

By a wide margin, Californians voted to continue leveraging billions of dollars in fees paid by the state's hospitals to draw matching federal money that funds services for people with low incomes or disabilities. If voters hadn't approved it, the program might have "sunsetted" at the end of next year, and $3.5 billion in annual net hospital revenue used to care for Medi-Cal patients would be lost. The measure requires voter approval to change the formula and a two-thirds majority vote of the California Legislature to scrap the program, making it more difficult for the money to be assigned to other purposes. It's worth noting that the public was so unified that there was virtually no organized opposition to Prop. 52.

CheckboxProposition 55: Income Tax Increase on High-Income Taxpayers Extended

California voters extended income-tax rate increases on Californians with earnings above $250,000 that were established by voters in 2012 through Proposition 30. Instead of expiring in 2019 under that law, the high-income tax rates will be extended through 2030. This measure is expected to raise $4 billion to $9 billion a year, depending on the performance of the stock market and the economy. The main beneficiary of the revenue will be schools and community colleges, which will receive about half of the total collected. But it also includes a new state budget formula that provides more funding for the Medi‐Cal program. Based on estimates and decisions made by the director of the Department of Finance, Medi-Cal stands to receive up to $2 billion of additional annual funding in some years.

CheckboxProposition 56: Cigarette Tax

This proposition, which will raise state taxes on tobacco products, passed with 64% of the vote. Voters increased the cigarette tax by $2 per pack, or ten cents per cigarette. Equivalent increases will affect other tobacco products and electronic cigarettes containing nicotine. About 40,000 Californians die each year of tobacco-related illness. Research has shown that higher taxes reduce sales of tobacco products.

The tax will generate up to $1.6 billion in state revenue in 2017-18, with potentially lower revenues in future years. The lion's share of the money will be used on health care for low-income Californians enrolled in Medi-Cal, with smaller portions dedicated to anti-tobacco efforts. The monetary cost of smoking in California is $18 billion a year, or $487 per Californian, according to the law's proponents. Reducing the smoking rate in California will benefit not just the smokers themselves but every resident of the state. Tobacco-related diseases rob us of the lives of far too many people. Our economy suffers not only from the loss of those who die or are crippled by disease but also from the massive direct costs of their care. Considering lost productivity and premature mortality, the total economic cost to California is a staggering $20.6 billion a year in current dollars.

CheckboxCheckboxCheckboxLocal Soda Taxes in San Francisco, Oakland, and Albany

The beverage industry mounted a significant media campaign opposing ballot measures in three Bay Area cities that would add a one cent per ounce tax on sugar-sweetened soda and other beverages. The industry argument that it was a "grocery tax" rather than a "sugar tax" fell short, and the proposal won by large margins in all three jurisdictions. Proponents hope the tax will reduce consumption of large quantities of refined sugar, thereby reducing the prevalence of obesity, tooth decay, heart disease, and diabetes. In all three cities the tax will not apply to excluded categories of drinks, such as milk products, 100% juice, baby formula, alcohol, or drinks taken for medical reasons.

In San Francisco, Local Measure V passed 62% to 38%. It is expected to raise $15 million for the general fund starting in 2018. In Oakland, Measure HH passed by nearly an identical margin, and it will direct $6.8 million a year to the city general fund and set up an advisory board of parents and experts to recommend how the City Council should spend the money. In suburban Albany, which borders Berkeley (whose voters successfully implemented the sugar tax a year ago), Measure O1 passed with 72% support. An estimated $220,000 in tax revenue will go to the city's general fund.

The incidence of diabetes has tripled in the last 30 years, and the US Centers for Disease Control and Prevention (CDC) says rates are on track to triple again by 2065. More than 2.3 million people in California have diabetes, which is on the verge of becoming one of the state's most urgent health issues.

If we don't turn this around, the toll on our children will be devastating. From 1999 to 2008, the percentage of teens with diabetes or pre-diabetes surged from 9% to 23%. Among Americans born after 2000, about one in three will develop diabetes, including roughly half of Latino and African American children. The main predictor of diabetes is sugar consumption, and half of all sugar in the American diet comes from soda, sport drinks, energy drinks, bottled teas, and fruit-flavored beverages. Every 20-ounce bottle of soda contains the nutritional equivalent of 16 teaspoons of sugar, and two-thirds of California teens drink at least one sugary beverage every day. All told, Americans consume an astonishing 39 pounds of sugar each year, according to the American Heart Association.

Thank you, California, for supporting measures that will save lives, strengthen the safety net, and make the state a better place to live and work.